Tag: Q1 2025

With Shopify’s acquisition of Vantage Discovery, AI is once again a focal point in eCommerce. This acquisition suggests that Shopify will prioritize improvements in product search, filtering, and merchandising. However, one area that remains underutilized by many Shopify merchants is AI-driven dynamic pricing.

This post explores how dynamic pricing can enhance Average Order Value (AOV) and improve inventory management, particularly for small to mid-sized Shopify merchants.

Dynamic Pricing for SMBs: A Missed Opportunity

Larger e-commerce operations have leveraged algorithmic pricing strategies for years, yet many Shopify merchants in the $5M – $50M GMV range have yet to adopt them. Implementing dynamic pricing on collection pages, product detail pages (PDPs), and subscription products can provide a more data-driven approach to pricing optimization.

Optimizing AOV with AI-Driven Pricing Adjustments

Pricing is a direct and effective lever for increasing revenue efficiency. Consider the following scenario:

• A product priced at $10 with an inventory cost of $5 results in a 50% gross margin.
• Increasing the price to $11 represents a 10% revenue increase, but it improves gross margin by 20%.
• This additional margin can be reinvested into customer acquisition, operations, or infrastructure.

AI models can analyze pricing elasticity and adjust prices in real time to maximize AOV while minimizing the risk of reduced conversion rates.

Using Dynamic Pricing for Inventory Optimization

Excess inventory ties up capital and incurs storage costs, making it a liability for merchants. AI-driven pricing adjustments can dynamically reduce prices on low-turnover products, leading to:

✔ More efficient inventory turnover
✔ Reduced holding costs
✔ Improved cash flow

Unlike static discounting strategies, AI-based pricing can adjust dynamically based on demand patterns, historical sales data, and seasonality, allowing for more efficient inventory management.

AI & Dynamic Pricing in eCommerce

Shopify’s investment in AI will likely bring advancements in search and product discovery, but dynamic pricing remains an area where many merchants have yet to take full advantage. As AI-driven pricing tools become more accessible, adoption among SMBs will likely increase, providing a more sophisticated approach to revenue optimization.

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Have any questions or need help thinking through a challenge or opportunity?

Speak to one of our Shopify professionals today. We are are here to help… no strings attached.

Shopify Plus Pipeline: Steady Growth in Maintenance, Slower Migrations

At Ambaum, we categorize our new potential merchants into two primary groups:

1. Ongoing Maintenance – Existing Shopify Plus merchants looking for continued support and strategic guidance.
2. Migrations – Merchants moving from third-party platforms to Shopify.

So far in Q1, we’ve seen continued traction in the Ongoing Maintenance category. More Shopify Plus merchants are seeking Fractional CTO services and expert Shopify development support, reinforcing the demand for long-term, strategic partnerships.

On the Migrations side, we’ve had an increase in leads, signaling strong interest from brands looking to transition to Shopify. However, deal closures have been slower. A significant portion of these merchants come from legacy industries—manufacturing, parts, and accessories—where sales cycles are inherently longer due to the complexity of their businesses and decision-making processes.

Merchant GMV: A Choppy Start to the Year

When looking at Gross Merchandise Volume (GMV) across our merchants, trends have been unpredictable. Month-over-month and year-over-year performance continues to be inconsistent, reflecting the uncertainty in the broader market.

However, March has shown improvement over February, both on a month-to-date and year-over-year basis. While this is a positive sign, the landscape remains a “mixed bag” with fluctuating results across different verticals.

Macroeconomic Factors: Stock Market & Tariff Uncertainty

External economic conditions are playing a role in merchant behavior. Stock market volatility and ongoing tariff uncertainties seem to be causing some hesitation among businesses that might otherwise be moving forward with investments in ecommerce growth. Many brands are taking a wait-and-see approach before making major platform migrations or significant technology investments.

Looking Ahead

While Q1 has had its ups and downs, we remain optimistic. The continued demand for Shopify Plus maintenance services and the steady flow of migration inquiries suggest a strong long-term outlook. As economic conditions stabilize, we anticipate more merchants making the leap to Shopify, especially those in legacy industries looking to future-proof their businesses.

At Ambaum, we’ll continue to support our merchants with expert Shopify solutions, whether they need ongoing optimization or are ready to make the transition to a more scalable eCommerce platform.

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Have any questions or need help thinking through a challenge or opportunity?

Speak to one of our Shopify professionals today. We are are here to help… no strings attached.